Monthly market commentary

At the start of September, there was hope that issues surrounding the global economic nervousness could become clearer, but matters seemed to worsen in the course of the month. In the US, a much-awaited third round of quantitative easing was not announced, while the expected unemployment rate remained above 9%. The euro zone hasn’t yet figured out a solution to correct the course of Greek’s sovereign debt crisis; the impact is now being felt on some large European banks. All these factors are raising doubts on the health of the global economy; this directly affects exporting nations among emerging economies. While the impact on India’s economic growth is being debated, high inflation and resultant high interest rates are hitting gross domestic product (GDP) growth keeping foreign investors at bay. The latest Index of Industrial Production (IIP) data shows a growth of 3.3% compared with 8.8% in June.